SMSF pensions

Like all super funds, self-managed super funds (SMSFs) can provide you with pension or lump sum benefits in retirement. Retirement is a condition of super release if you have reached your preservation age. Your preservation age is between 55 and 60, depending on your date of birth. Super benefits are tax-free if you’re over the age of 60.

If you start a super pension income stream, you need to transfer funds from your accumulation account to your retirement account to fund your pension. The earnings on these funds are tax-free. You can transfer up to the transfer balance cap (up to $1.7 million) into your retirement account. You need to withdraw a minimum percentage of your retirement account balance each year, which varies, depending on your age.

Transition-to-retirement (TTR) pensions can be commenced once you have reached your preservation age while you’re still working. However, the earnings on funds that support TTR pensions are still taxed at 15%, unlike the funds that support your super pension are if you have retired.